Five Tips for Tax Preparation

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It’s that time of year – tax preparation season will be here before you know it! I’m sure some of you dread this time of year, but I’ve got a few suggestions that can make it a bit more bearable and help you in the long run.

Tip #1

If you’re not the do-it-yourself type, hire an experienced, professional tax preparer to handle your returns. Stay away from the generic chain tax prep services – they tend to significantly overcharge for preparing returns…as in charging by the form (which we view as being a rip-off) instead of using an hourly rate (much fairer).

Tip #2

Make sure you have all needed tax documents. Sounds simple enough, but being organized about collecting your tax documents (where did I put that W-2?) makes life much easier for your preparer (and you too)!

Tip #3

Your preparer should ask you many questions, especially if it is the first time they are preparing your returns. Even after the first year, personal/financial situations change over time, and any qualified tax preparer will know to ask the important questions (law changes, new possible deductions, etc.) so you don’t leave anything on the table.

Tip #4

If you work with a CPA, hopefully they offer advice for your specific tax situation during and after preparing your returns. This can be very important for not only the current year (can a traditional IRA contribution lower your tax bill?) but the following year as well (should you contribute more to your 401(k) at work?). Offering suggestions that can improve the amount you get back (or help you pay less than you have in the past) can be very valuable for some.

Tip #5

Your tax professional should be willing to speak with any other professional you have hired. There are many reasons why insurance professionals, professional financial advisors, attorneys, etc. should speak to your tax preparer (with your permission of course) to coordinate on issues that may be important and need to be looked at from different perspectives. This way, you get the input of trusted professionals on issues that overlap into several areas of your personal financial/tax situation.

Find an experienced local tax preparer who works for a professional tax preparation firm, earns his/her money from hourly/job fees (NOT charging by the form), believes in helping their clients improve their tax/financial situations, and has the heart & demeanor of a teacher, NOT a salesman, and chances are you’ve found the right tax preparer to help you with your tax situation.

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